OCC BULLETIN 2017-42
Subject: Flood Disaster
Date: October 17, 2017
To: Chief Executive Officers of All National Banks, Federal Savings Associations, and Federal Branches and Agencies of Foreign Banks; Department and Division Heads; All Examining Personnel; and Other Interested Parties
Description: Temporary Exceptions to FIRREA Appraisal Requirements in Areas Affected by Severe Storms and Flooding in Florida, Georgia, Puerto Rico, Texas, and the U.S. Virgin Islands
The Office of the Comptroller of the Currency (OCC), the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the National Credit Union Administration (collectively, the agencies) are exempting real estate-related transactions from appraisal requirements in major disaster areas as declared by President Trump. The exemptions will be in effect for a three-year period from the date of declaration. Included are parts of Florida, Georgia, Puerto Rico, Texas, and the U.S. Virgin Islands. The agencies are providing relief from appraisal requirements for transactions involving real property under the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA) and its implementing regulations. The agencies are jointly publishing the attached news release and order in the Federal Register.
Note for Community Banks
This guidance applies to all national banks and federal savings associations (collectively, banks) with loans secured by real estate located in an affected area.
Section 2 of the Depository Institutions Disaster Relief Act of 1992 authorizes the agencies to make exceptions to statutory and regulatory requirements related to appraisals for certain transactions. The exceptions are available for transactions that involve real property in major disaster areas if the agencies determine that the exceptions would facilitate recovery from the disasters and would be consistent with safety and soundness. The agencies have made these determinations and grant exceptions to the appraisal requirements, provided certain criteria are met.
To qualify for this exception, banks should maintain appropriate documentation of the following:
Banks are encouraged to refer to OCC Bulletin 2010-42, “Sound Practices for Appraisals and Evaluations: Interagency Appraisal and Evaluation Guidelines.” Bulletin 2010-42 addresses prudent standards for preparing collateral valuations when a property transaction qualifies for an exception.
Please contact Kevin Lawton, Appraisal Specialist in the Credit Risk Division, at (202) 649-6770.
Grace E. Dailey